How France became a FinTech fortress

A recent blogpost by Currencycloud has detailed how a goldrush in the French FinTech market has led to the country become the third biggest FinTech hub in Europe.

Back in 2017, newly elected French president Emmanuel Macron proclaimed he wanted France to be a ‘start-up nation’. Macron was mocked at the time for his comment, with investment in French start-ups at the time falling considerably.

Four years later, France is now home to 735 FinTechs. According to Currencycloud, French FinTechs have raised €1.9bn this year alone – which is more than double the amount the market attracted in 2020.

While FinTechs had arrived in the French market prior to 2017, many of these startups had not achieved significant enough notoriety to make any waves. So, what has driven this rapid market growth since?

Currencycloud believes a lot of the rewards being reaped today are due to the determination of the French government to make France a start-up nation. This was summarised succinctly by Cyril Chiche – CEO of French FinTech startup Lydia – when he said that ‘every big investor new stops in Paris’.

Lydia itself has been a part of the gold rush, with the mobile payments app receiving $131m in Series B funding at the end of last year. This year, Paris-based FinTech Swile bagged $200m from Japan’s Softbank, which made it France’s seventh FinTech unicorn. Meanwhile, Ledger – another FinTech startup from France – raised a whopping $380m in its Series C funding round.

Besides native companies, many overseas firms are also viewing the French FinTech market with more prying eyes. San Francisco-based ecommerce payment business Square recently moved into the French market, while UK-based connectivity platform Yapily also made its home in France. Fellow UK FinTech PrimaryBid also recently expanded its London office to launch in France.

So how can France keep this momentum going? According to Currencycloud, the watchwords here are innovation and international development.

“If France wants to be a major player in the Fintech ecosystem, innovation and international development will be essential. With neobanking expected to show a revenue growth of 60.9% in 2022, France’s Fintech ecosystem is at a critical juncture. To catch up with UK and German FinTechs, many of the country’s FinTechs will need to partner with FinTechs outside of France, and crucially ensure that they can access new markets quickly and seamlessly.

Read the full Currencycloud blogpost here.

Copyright © 2021 FinTech Global

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